In looking for a way to create an abbreviated pathway for
the Food and Drug Administration (FDA) to approve generic biologic therapies
(aka biogenerics or follow-on biologics), there are lots of questions about how
to achieve the proper balance between innovation and competition. The sticking
point (in general) has been that the brand name drugmakers and generics can't
agree on how long a biotech drug should be on the market before a generic
drugmaker can market a generic.

Under the proposed law, if FDA approves a biological product
on the grounds that it is interchangeable to a reference product, the
Department of Health and Human Services (HHS) is prohibited from making a
determination that a second or subsequent biological product is interchangeable
to that same reference product until one year after the first commercial
marketing of the first interchangeable product.

The act also authorizes HHS to issue guidance with respect
to the licensure of biological products under this new pathway, and it includes
provisions governing patent infringement concerns such as the exchange of
information, good faith negotiations and initiation infringement actions.

The Biotech Industry Organization (BIO) has called for 14
years of market exclusivity, while generic makers want the period limited to no
more than five years of protection. Not to be confused with patents, data
exclusivity is the period after the FDA approves a product during which an
imitator can't rely on the innovator's clinical data for safety and
effectiveness. It can run during and longer than the period of patent
protection.

The current measure for 12 years passed 16 to 7, despite an
earlier decree by the Obama administration that a seven-year exclusivity limit
sounded good. The Obama administration had sent out an earlier warning shot
that it considered seven years enough time to protect brand-name biotechnology
medicines from generic competitors. In a letter to Rep. Henry Waxman (D-CA),
the White House said seven years "strikes the appropriate balance between
innovation and competition by providing for seven years of exclusivity."

The posturing by the current administration is not a
surprise given that the U.S. government is the largest consumer of medical care
via Medicare and Medicaid and the fact that sales of biotech drugs were $40.3
billion last year. With creating a governmental health care system at the top
of its priority list, ways to cut costs are critical to any reform.

After considering at least four proposals all titled the
"Biologics Price Competition and Innovation Act of 2009," the HELP committee
declined several other proposals including voting down one by Sen. Sherrod
Brown (D-OH), which would have provided only seven years of exclusivity for
brand name biologics.

Sen. Barbara Mikulski's (D-MD) proposed a 10-year
exclusivity period, which could be extendable by one year if a supplemental
application was approved for one or more new therapeutic indications. Sen. John
McCain's (R-AZ) proposal would have provided a 10-year period of exclusivity
that could be extended by two years "if there has been significant therapeutic
advancements with respect to the reference product."

The vote was at least a small victory for major biotech
drugmakers, which have been lobbying for a period of 12 to 14 years before
generic equivalents could be approved. Biotech companies have been pushing for a longer period of data
exclusivity, saying that it can take 15 years and a $1 billion to develop and
market a biotech drug, so they need the longer period to make back their
investment. Generic drugmakers, not surprising, would like the exclusivity
period to be as little as possible.

This is just as small step, since the Senate plan could
change when the healthcare bill goes to the floor for a vote. It also must be
approved by the House.

So, what will the final number be for exclusivity? We'll
have to wait to see.

Stephen Albainy-Jenei is a patent attorney at Frost Brown Todd LLC, serving up chat at PatentBaristas.com. Write him with comments or questions at Stephen@patentbaristas.com. Albainy-Jenei doesn't own shares of companies mentioned in this article.